amarillo intro package 09(3)
DESCRIPTION
Introduction to Amarillo ProjectTRANSCRIPT
DOUBLE R LOFTSINVESTMENT OPORTUNITY
My Name is Darin Hudson. I have a property located at 705 Grant Street, in Amarillo Texas. It is a 37,152 Square foot warehouse in Downtown Amarillo. It was built in 1920 from beautiful red brick with huge thick wooden beams and large cast iron floor and corner brackets. The road running past the property is red brick as well. This type of construction is just not seen anymore. I have designed and integrated all of these property features into the build out. Amarillo is working very actively on their Downtown Revitalization Program. The City has vacated a 12,580 square foot alley as an incentive for me to move forward with this project. Amarillo is very excited about having this property as one of their key redevelopment projects.
I am looking for an investor to inject remodel money on a short term 18 month loan in the amount of $1,740,597. There is no current mortgage on the property as I purchased it in whole in June of 2007. I have a permit issued from the City of Amarillo to build the units. I have also received TIRZ approval for the rebate of 90% of the advalorum property taxes for the next 20 years from the TIRZ Board. This project also qualifies the investor, or financial institution for a new market tax credit, which gives the investor a 39% tax deduction on the amount of the loan, which can be taken in the first year, or over seven years.
I have completed one model unit in the building to illustrate the finish work of my product. There will be a total of 20 units when completed. The smallest unit would sell for a conservative $125 a square foot at $121,250, and the largest unit would sell for $356,000. These numbers are based on a finished unit. (I do not intend to sell
these units, but keep the building as a rental property). The first and only other existing Loft sales in the Downtown Amarillo area were last year, and they sold for $58.00 a square foot as an UNFINISHED SHELL. The Architect involved in the 6 Eagle Center lofts built two years ago informed me that the current owners spent between $120 and $140 per square foot in order to get them finished out. My units in contrast, are very inexpensive to build at $53.04 a foot, FINISHED. If the units were to be sold, they would sell easily sell at a ridiculously conservative $100 a foot based on today’s depressed market value. That price will go up as new activity and the effects of the New Downtown revitalization program take form, and the economy and lending markets strengthen, along with my contributions. I want to keep the property as an apartment building as well as complete 5 more of these projects within the same 5 block area of Downtown Amarillo. At a later date I will then create and stimulate the condo market that is just now starting to occur in Downtown Amarillo. At that point they will sell for a much higher price than $100 per square foot, possibly $200 or more per square foot. This is only a preliminary and conservative sales price compared to the 6 Eagle Center units that were built on Polk Street (approximately five blocks from this location). I will be pre-leasing upon procurement of my construction loan. Conservative rent amounts are $32,337 monthly. Existing and comparable square foot rental prices would put the building at $38,322 monthly. Please note that I am however, using the Conservative numbers in all my calculations.
The property is located two blocks from the convention center, one block from City Hall, as well as two blocks from the brand new Performing Arts Building completed in 2007. This project will create approximately $2,000,000 in value added equity, after all costs are in. This project will lease quickly, and ultimately sell quickly when the time comes to sell, as it will be the first of its kind in Amarillo. The project will offer huge downtown living spaces, with secured off street, on site parking, private individual courtyards, 15 foot high wooden raftered ceilings, pitched glass 6x12 skylights, granite and maple kitchens, split level, free hanging open second level areas, brick walls, low voltage wired lighting, stained concrete floors, as well as refinished 2” thick flooring which currently exists in 14 of the units. The view from their large, full 13’ high, glass aluminum storefront style windows, looks out to private landscaped courtyards with a 10 foot privacy wall around it, which will be something that no other Downtown properties have to offer.
NORTH FACE OF BUILDING SOUTHERN 7 UNIT AREA.BAY DOORS GET REPLACED WITH RIGHT WALL IS REMOVED7 SILVER STOREFRONT OPENINGS AND REPLACED WITH 7& SURROUNDED BY COURTYARDS SILVER STOREFRONT
OPENINGS
5 YEAR FUTURE SALES INFORMATIONAt $125.00 per square foot
NUMBER OF UNITSSQUARE FOOTAGE
PRICE ER S.F. SALE PRICE
Unit # 1 1,010 x $126,250
Unit # 2 1,500 x $187,500
Unit # 3 1,500 x $187,500
Unit # 4 1,500 x $187,500
Unit # 5 1,500 x $187,500
Unit # 6 1,500 x $187,500
Unit # 7 1,200 x $150,000
Unit # 8 3,760 x $470,000
Unit # 9 3,530 x $441,250
Unit # 10 3,450 x $431,250
Unit # 11 3,560 x $445,000
Unit # 12 3,080 x $385,000
Unit # 13 3,262 x $407,750
Unit # 14 980 x $122,500
Unit # 15 970 x $121,250
Unit # 16 970 x $121,250
Unit # 17 970 x $121,250
Unit # 18 970 x $121,250
Unit # 19 970 x $121,250
Unit # 20 970 x $121,250
TOTAL S.F. 37,152 125 $4,644,000
VIEW OF EXISTING WAREHOUSE INTERIOR MAIN FLOOR BEFORE DEMOLITION
The Construction estimate takes into account the minimal finish work required in retrofitting the existing Brick building with its exposed ceiling, as well as all 2” Tongue and groove wood floors that exist. The existing substrates just need to be cleaned up and refinished.
Construction EstimateRevision Date:
Lofts at 705 S. Grant Street 705 S. Grant Street Amarillo, Texas 37152 SF Usable
37152 SF Rentable 1 A.O.
1 Supervision 17500 0.47 SF2 Construction Permits 12228 0.33 SF3 Demolition 20000 0.54 SF4 Site Work and Utility Costs 224160 6.03 SF5 Building Exterior Shell 344211 9.26 SF6 Casework and Cabinetry 110400 2.97 SF7 Door Installation 6200 0.17 SF8 Door Frames and Interior Borrow and Sidelites 6200 0.17 SF9 Doors 10540 0.28 SF
10 Hardware 5580 0.15 SF11 Partitions 123935 3.34 SF12 Flooring 43959 1.18 SF13 Painting 44974 1.21 SF14 Wall Finishes 3300 0.09 SF15 Ceiling Systems 48375 1.30 SF16 Window Coverings 11500 0.31 SF17 Fire Protection Systems 52013 1.40 SF18 Plumbing 37152 1.00 SF19 HVAC 40303 1.08 SF20 Electrical Service and Power Systems 80655 2.17 SF21 Electrical Lighting 37152 1.00 SF22 Computer Room, Generator, and UPS Systems 0 0.00 SF23 Life Safety, Access Control, and Surveillance Systems 27850 0.75 SF24 Miscellaneous Construction and Contingency Items 62711 1.69 SF
Subtotal $1,370,900 36.90 SF
25 Overhead 10% $137,090 3.69 SF
26 Profit 8% $120,639 3.25 SF
27 Tax 6.875% $111,968 3.01 SF
28 Total $1,740,597
Basic Construction Costsper Usable
SF $51.71
Basic Construction Costsper Rentable
SF $46.85
VIEW OF MY LAST PROJECT IN ALBUQUERQUE, SILVER HILLS LOFTS
EXTERIOR IMPROVEMENTS 705 SOUTH GRANT TX.My intention is to renovate the entire building, incorporating improvements to the fascia, silver aluminum storefront windows and doors, with custom silver roof panel private walled courtyards and private parking areas for each unit, fenced and gated entryways from the street with card key access gates, 8 surveillance cameras around the full exterior of the property, and parking lots that records for 6 months, new 8 foot brick front property division wall with slate pilasters, as well as full replacement of the roof with a 4 inch sprayed cellulose polyurethane roof. New asphalt parking lots both sides. Three new steel decorative canopies at the front middle 3 units located at the top of the store front window systems.
F
INTERIOR IMPROVMENTS
VIEW OF THE NEW MODEL UNIT AT THE DOUBLE R LOFTS
All units will have all new 2 hour rated fire wall division. All interior walls will be fully insulated. All electrical will be new, cad 5 phone, new cable, and wire for fiber optics for future improvements for the future downtown expansion planned. The existing 1950’s exposed wood ceilings will remain, with a new sandblasted and clear finish. All new copper plumbing and new sewer lines. The existing concrete floors will be stripped and clear sealed as well. All second story loft areas will be padded & carpeted; with the undersides being exposed wood, with clear sealer. The existing units with lower levels have an existing T&G 1” wood ceiling that will be sandblasted and clear finished, with low voltage cable light systems installed on dimmer switches. The existing
brick walls will remain and be cleaned and remain exposed. Existing block and concrete walls will have conduit exposed, as well as the existing wood ceiling’s, all other electrical will be concealed in the new wall construction. Interior lighting in the living areas will be low voltage wire system lights. Existing skylights to remain and be repaired, as well as new skylights installedat all of the units.
BATHROOMS-Granite tub surrounds fitted with new glass enclosures, Maple modern vanities, Granite vanity tops, mirrored medicine cabinets, vanity light, exhaust fans with heat and light, any and all wood floor areas will have slate tile over 3/8 hardy backer, exposed concrete floors will remain, with a clear sealer, & unique towel bars as well.
VIEW OF NEW BATHROOM IN MODEL UNIT AT DOUBLE R LOFTS
KITCHENS – Maple cabinets with pulls designed in the door or drawer, with granite counter tops and entertaining islands, slide in black or stainless stoves, black or stainless refrigerators, black or stainless dishwashers, black or stainless convection microwaves over sink area, new 2 compartment deep stainless sinks, sprayer faucets, garbage disposals, and stainless Decora switchgear. The center floor in the kitchen will have a 4’ x 8’ x ½” thick Lexan panel light installed to allow light from the overhead 4x8 skylight to flow to the lower level of the unit. Full pantries as well.
NEW MODEL UNIT KITCHEN & GEUST BEDROOM AT THE DOUBLE R LOFTS
LIVINGROOMS -Clean concrete and wood floors and clear cote, All new aluminum storefront windows full height looking into each courtyard, all interior doors will be 36” solid core birch, clear finish doors with redi frame factory silver finish jambs. Wood Floor decking at front of each 2 story unit will be removed to install a 4 foot wide ½” thick Plexiglas floor at front full height glass wall as to allow light into lower areas.
EXISTING LIVING ROOM IN MODEL UNIT
LOFT BEDROOM AREAS – carpet and ½ 8 pound pad at upper loft areas, aircraft cable handrails to meet UBC with top 3 x 1 inch grab rail, with Sheetrock half walls to shield the sleeping area, Steel diamond plate stairs, on an 8’ box support beam. Mirrored silver frame closet doors with a built in deskand shelves to the side, desk will be wired with phone, cable, and fiber, ceiling fan, and cable low voltage lights.
LOWER FLOORS- Clean and seal floor’s, clean and seal brick or concrete walls, sandblast wood ceilings and clear seal, low voltage cable light systems.
NEW BASEMENT IN MODEL UNIT, AT NIGHT
GENERAL - install new HVAC units every unit.-insta hot electric hot water heaters each unit.-separate utilities.-washer and dryer combination each unit-pantries each unit -Self closing combination gate at each Courtyard entry.-automatic garage doors at each private courtyard.-roof shall be 4” Cellulose foam system.
LANDSCAPING custom concrete/pavers for the drive pads in each courtyard and walkways, new xerascape landscaping in each courtyard, one tree in each courtyard, and 4 trees at front of building, something that grows fast and large, but produces little pollen, or debris, on minimal water.
To View my last project that is located at 2001 Gold Avenue in Albuquerque at:
http://loftsatgold.com/
or
http://www.silverhilllofts.com/
The Silver Hills Lofts project is currently selling for $250.00 a square foot.
Pro-Forma
705 S Grant Street Amarillo Texas ~ Monthly Rental Income
Type
Unit Size ( Sq. Ft.)*
Upside Potential
Rent / Foot
Monthly Rents
Market Rents
1b/1b 1010 1.13 $1,141 $ 1,141 1b/1b 1500 1.00 $1,500 $ 1,500 1b/1b 1500 1.00 $1,500 $ 1,500 1b/1b 1500 1.00 $1,500 $ 1,500 1b/1b 1500 1.00 $1,500 $ 1,500 1b/1b 1500 1.00 $1,500 $ 1,500 1b/1b 1200 1.13 $1,356 $ 1,356 2b/1b 3760 0.71 $2,670 $ 3,760 2b/1b 3530 0.71 $2,506 $ 3,530 2b/1b 3450 0.71 $2,450 $ 3,450 2b/1b 3560 0.71 $2,528 $ 3,560 2b/1b 3080 0.71 $2,187 $ 3,080 2b/1b 3262 0.71 $2,316 $ 3,262 1b/1b 980 1.13 $1,107 $ 1,107 1b/1b 970 1.13 $1,096 $ 1,096 1b/1b 970 1.13 $1,096 $ 1,096 1b/1b 970 1.13 $1,096 $ 1,096 1b/1b 970 1.13 $1,096 $ 1,096 1b/1b 970 1.13 $1,096 $ 1,096 1b/1b 970 1.13 $1,096 $ 1,096
37,152 $5,985
$ 0.87 $32,337 $38,322
705 S Grant Street Amarillo Texas ~ Operating Statement
Income
Current Rents
Annualized
Market Rents
AnnualizedGross Potential Rent $388,045 $459,864Other Income (Banked) $0 $0Annual Scheduled Gross Income $388,045 $459,864Vacancy Allowance (3.0%) ($11,641) ($13,796)Effective Gross Operating Income $376,404 $446,068
Estimate Annual Operating Expenses
% of EGOI
Projected Expenses
Projected Expenses
Property Insurance (Est.) 1.37% $5,175 $5,175Payroll Expense 0.96% $3,600 $3,600
Administrative Salaries 0.00% $0 $0
Manager Salaries 0.00% $0 $0
Employee Rent Credit 0.96% $3,600 $3,600
Payroll Taxes 0.00% $0 $0 Management Fee 0.00% $0 $0 Workers Comp. Insurance 0.00% $0 $0 Employee Benefits 0.00% $0 $0Utility Expense 3.70% $13,932 $13,932
Electricity (12 month Average) 0.48% $1,788 $1,788Water & Sanitation 2.32% $8,724 $8,724Trash Collection 0.59% $2,220 $2,220Natural Gas 0.00% $0 $0Other utilities 0.32% $1,200 $1,200
Repair and Maintenance 5% of EGOI 5.00% $18,820 $18,820Management Fee ( 5%) of EGOI 5.00% $18,820 $22,303Real Estate Taxes (2.530%) Ad Valorem. Minus 90% TIRZ Rebate over 20 years $25,747 $25,747
Total Annual Operating Expenses -$2.32-
22.87%
($86,094)
($89,577)
Net Operating Income$290,31
0$356,49
1
705 S Grant Street Amarillo Texas ~ Pricing and Returns
Debt Service on 1st
Current Rents
Market Rents
*Price:2,340,59
7 *n= 360 years Debt Ser 1st (125,403)
(125,403)
*Loan-to-Value 74.37% *I= 6.06%interest rate
Pretax Cash FL. $164,907
$231,088
*Down-payment 600,000 *fv= 0future value Cap Rate 12.40% 15.23%
*Debt Service
-10,450.2
2 *pv=1,740,597
loan amount
Cash-on-Cash 27.48% 38.51%
*(Assumptions)
(125,403) *type 1
pymnt. prd. GRM 6.03 5.09
DCR 2.315Actual I=
0.50500000%
Price Per Unit
$ 117,030
Price Per Sq. Ft.
$ 63.00
Principal Reduction
$ 21,136
$ 21,136
Pre Tax Cash + Principal Reduction $ 6,044
$ 252,225
Total Return 31.01% 42.04%
I am excited to begin construction on the remaining 19 units as soon a possible and look forward to hearing back from you with any questions you may have.
Thank You
Darin HudsonBCH Development and Construction706 N Cleveland Unit COceanside CA 92054
